May 20, 2016

Health Care Costs: Is Next Year Going To Be Bad?

credit: Huffington post.com
I guess we should be thankful we won't be surprised: the warnings about a major increase in health care insurance costs are hard to avoid. Several leading insurers have already announced they will not participate in the Marketplace in any states, or areas that are too rural to provide them with enough income. Some places, like Alaska or Alabama, may have only one company offering to sell insurance through healthcare.gov starting in the fall. With no competition, I think we can all guess what the costs and policy limitations will look like.

In those states that will offer the customer several choices, rate increases as high as 35% are being mentioned. That will be coupled with fewer doctors or specialists in network, a limited choice of hospitals or clinics, and fewer drugs in the lowest tiers of coverage. The Affordable Care Act's flaws are starting to cause serious problems. They are fixable, but at the moment our political climate is more interested in fixing blame.

If you are 65 or older, this drumbeat of bad news doesn't affect you directly. Medicare will have little, if any, premium changes. Rate increases for Medigap, Part D drug coverage, or Medicare Advantage programs are likely to be much more reasonable because of intense competition. 

However, pre-retirees, or younger spouses will find themselves trapped in a system that is rapidly reaching unsustainability.The health care system in the United States is unlike any other developed country. We have a for-profit approach to health care. While that provides for the best medical care possible, it has the very real potential for financial hardships or even ruin if someone isn't prepared or can't find coverage.

Recent studies tell us that at least $250,000 in lifetime costs are very possible for those over 65. Don't we assume that with Medicare, a Medigap policy, or an Advantage option, and drug coverage that can't possibly be right? 

Unfortunately, the most expensive parts of our health costs aren't covered by those items. Moving into an assisted living facility can easily cost $3-$4,000 a month (or more). A nursing home might be closer to $5,000 a month. Medicare pays nothing, or for only a limited period of time.

If you elect to stay in your home you will still need expensive on-site nursing and custodial care that can cost about the same as being in a facility. Research shows 70% of us will need either short and long term care at some point.

Traditional Medicare doesn't pay for hearing aids, dental care, or eyeglasses (except after cataract surgery). It has limits on durable equipment. Except for a few exceptions it does not cover alternative care. Even with Part D coverage, prescription drugs are not going to get cheaper. Medicare is prohibited by law from negotiating lower drug prices. Congress has decided that Big Pharma must be protected, even with profits approaching $100 billion a year.

Lots of folks insist that health insurance is better and cheaper when left to private companies. Having been in the individual health market for over 30 years, I beg to differ. Rates always went up, sometimes by a little, sometimes by a lot, but always up. Coverage went down, drug costs showed massive increases, and deductible got higher. Since I became Medicare-eligible my direct costs have fallen by over 50%.

Of course, with some new drugs costing up to $10,000 a month (!), I still face very high costs if I am unlucky enough to get a serious disease that requires such expensive treatment.

What I will never understand is the protest against single-payer insurance until someone signs up for Medicare. Then, the complaints cease and the praise begins. Medicare is a single-payer system that works well for the consumer. Is there fraud? Sure. Do doctors make less? Yes. Does it need to make itself financially healthy? Of course. But, looking at the private system those under 65 must live (or die) with, I am hard pressed to see how the price gouging, lack of competition, and poor service is better. And, all of that started well before the Affordable Care Act.

Next year is going to bring back-breaking cost increases to millions of our fellow citizens. It is also going to bring us a new president and many new members of Congress. Whether that means any fundamental changes is anyone's guess.


27 comments:

  1. Bob, it's almost shocking how expensive health care can be. I'm still receiving bills from my hospital stay, from nearly two months ago. It looks like the total cost will be close to $250,000, with my responsibility being around $6-7,000. Not sure how much the chemo will add. I am so thankful for good insurance. We've had the same health insurance through my husband's job (he's a gov't employee) for nearly 30 years. A few days ago, we did the math. We've spent over $100,000 for our share of the policy over the years, so it has definitely saved us much.

    Surely there's an answer for our country. Health care providers deserve to be paid well, and the average person should be able to purchase insurance. It seems that the very poor and the rich have more options than the average people in our nation. That's just wrong. That segment of our population has contributed so much to society, yet many are one hospital stay away from potential bankruptcy.

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    1. I pray you are doing well in your battle against cancer. It is a double tragedy when someone suffers from a major disease or illness and then is faced with massive financial issues. Luckily, that doesn't seem to be your situation.

      Having great health care available is pointless if it is priced so too few people can take advantage.

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  2. Single payer for all!
    I wasn't sure if I was eligible for an Obamacare subsidy or not. Never know my income until the next year. They convinced me to take it. I wasn't eligible and paid thousands in penalties. Something seemed off but....Then I got an amended 1095A---was going to get a refund. Seemed more reasonable as I was only on Obamacare for half the year--then Medicare.. Got a third 1095A. When I called they said not to do anything as I was going to get a 4th on 6/8, and no they couldn't explain more. It should have been in my Obamacare computer file---they don't have the same messages. Wasn't.

    Yesterday I got a letter from the IRS (who I had called earlier) saying my taxes are wrong---1095A part to be exact. Not doing anything until I get the 4th amended 1095A.

    I'm a big supporter of Obamacare yet I reached my limit.

    Still I feel glad that I can afford health insurance. Good healthcare should be a right....

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    1. Deciding who lives or dies, or who gets better and who gets worse is strictly a dollars and cents decision right now. That is immoral.

      Yes, Obamacare has helped almost 13 million people get coverage, but the law has major glitches that won't get fixed because half the people who make that decision want to toss the whole thing, the good parts and the bad. Our health is now a political football, in a game being played for political points, not for the well being of those who are directly affected.

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  3. i'm worried when my husband does retire and we lose his incredible health insurance. We will do medicare with I guess the part D( is that the drug one)? Right now my cancer ( ongoing treatments come in @ 10,000 a month. What will we do?? When I was Revlimid before ( oral chemo) it came in at $ 11,000 a month for a 21 day supply. I have a grant with the LLS for myeloma so my copays of $65 were covered by them. But what about later, ??? It scares me....

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    1. Costs like you quote are just so out of bounds they are hard to grasp. In other developed countries I would be willing to bet the cost is at least 50% lower, if not more.

      Yes, Part D is drug coverage. It is provided by private companies under contract with Medicare. Check very carefully what drugs are covered and at what cost. You will still have a sizable deductible, but you will pay the contracted rate that the insurance company has negotiated for the drugs, well below what you would pay in cash.

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  4. Health Care is our most worrisome retirement expense,mostly because it is hard to figure out what it will be each year!! We've been on an Obamacare plan at a reasonable cost, but that may change in the next year. As business owners we always purchased our own insurance over the years, and would take very high deductibles, sometimes even $10,000! to keep premiums under $1000 a month, but not comfortable with that route at this point in our lives. Time will tell I suppose, but it is an abomination how health care in this country is handled.We met some Canadians in Mexico last month who were retiring early and moving to Bucerias, going to take the local Mexican insurance and also pay cash at times since cash fees for health care in other countries are reasonable. Also,USA does NOT have the "best" health care. As a Labor and Delivery nurse we heard, at every conference, how America had a very high infant mortality rate and premature delivery rate compared with other countries. (Who all have national health care systems in place.) Due to $$ patients often receive treatments that have NO BASIS IN EVIDENCE like bypass surgeries and multiple stents. (Read some Dean Ornish,M.D. and Dr. John McDougall,M.D. for more info on what really works ..) Maybe Ken and I should move to Mexico for a couple of years till Medicare eligible!!Isn't it a shame Americans, in such a prosperous country, have to think like that??!!

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    1. You would not be the first people to go to another country because of health costs, or fly to India for surgery (about 80% cheaper).

      If the people who make the laws were not mostly white, male, financially well off, and able to be bought by lobbyists I think our health care system would be remarkably different (and better).

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  5. For generic proscription drugs try https://www.blinkhealth.com. Your doc sends them proscription and you have it filled locally thru your own pharmacy or CVS, Walmart, etc.

    Credit to CBS evening news-watch every blue moon, where's Walter. Their prices are less than I pay (thanks to wife's Insurance) co pay for 90 day drug supply. Several friends are using it.

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  6. We have the 70th rated health care system in the world, which is why I have to laugh when people respondto complaints about cost and delivery with that. "But we have...". Our delivery of services, ifection rates in hospitsls, and mortality rates among pregnant women and youth are just a few if the areas we lag in.I have had better health care and delivery in other countries and I have really good insurance. I cry for my kids though, looking at what they are paying. My daughter's share a a midnight hospital visit due to severe pleurisy was six grand, and she didn't even stay.

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    1. America ranks quite low on several measures, like education, and overall health. But, we have a collective image that puts us first in everything. It is hard to effect changes with such a big gap between reality and perception.

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    2. Have you watched Michael Moore's Where to Invade Next? It puts our perceptions into the light of reality.

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  7. At a minimum the USA needs to extend Medicare to all residents. It's in place and while it's not perfect it works. If sanity ruled that's what would happen and it's what the rest of the developed world has done, surely the world's richest country can afford to do the same. The solution seems so obvious and the current piecemeal private market system is never going to give the medical coverage that all people need at a cost they can afford.

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    1. Absolutely. We don't need to reinvent the wheel. We have a system in place that works well and could work for everyone.

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  8. I get frustrated by repeated claims that our for-profit health care system provides for "the best medical care possible." This gets repeated so often that most Americans believe it. But what is the evidence to support this claim? By just about any measure I'm aware of, Americans not only pay more for our health care, we have worse health outcomes. The belief that we have the best medical care possible is just brain-washing. -Jean

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    1. You are right, Jean. As I noted in my response to Barbara, we have an image that is unreal. My sentence in the post that mentions "the best medical care possible" should have read "the most advanced technology available" but that doesn't transfer to the best care.

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  9. A friend of mine was in the hospital for a week with an infection from his pacemaker. He said insurance will pay most of it. But he told me the bill: $400,000! Ridiculous. But so far I haven't heard a viable solution.

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    1. The charges have no connection to reality or actual costs. Since nobody actually pays whatever those ridiculous cost are, including the insurance companies, the figures become pure fantasy.

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  10. When I read about these worries about medical costs, I feel very fortunate to be a Canadian. In the province that I currently live in, medical care is free (no monthly premium). Because my husband is over 65, we are eligible for very inexpensive drugs. For example, for him to fill his prescription for a statin that he takes regularly costs less than $2. Although sometimes the wait times to see a specialist can be several months for matters that are not urgent, overall the medical care here is extremely good.

    Jude

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    1. Canada, and virtually all other western countries, have figured out how to provide decent health care to its citizens. Not us!

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  11. I agree with Jude. I am very happy to be a Canadian. My husband is over 65 as well so his drugs are almost free. The government pays half of his hearing aid costs.
    His company also continues to provide health and dental.

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    1. America has a program that works - Medicare. Why it is political poison to suggest using that model for all is strictly an economic decision. Big Pharma and their lobbyists give way too much money to members of Congress to allow them to follow common sense and their moral obligations. A for-profit health care system is illogical and dooms millions to illness, pain, and death.

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  12. As a diabetic, I have to tell you the insulin cost (I take two different ones) is a bank buster. I accept that at some point I may have to die because I won't be able to afford my medicine if it goes much higher.

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    1. Heavens, I had no idea insulin was so expensive. Diabetes is not that uncommon a disease. I would have though there is lots of competition, but obviously not. I just did a quick check. The price of insulin has increased by 300% in the last ten years, with higher increases ahead.

      Thanks, Barbara, for the eye-opening insight.

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  13. The folks with insurance from an employer simply do not care about this issue. Even the ones nearing retirement have no interest. All I hear is how terrible ACA is. They seem to forget that before ACA you could be denied insurance. Most people simply cannot see the possibility that they may need to buy their own insurance before the age of 65 due to loss of employment. These people seem to have the same foresight when it comes to their retirement planning. Buying into Medicare would be the solution but as you have already pointed out it will not be allowed due to toxic politics.

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    1. I think the figure is around 80% of Americans continue to get their health insurance through their employer. While the employee share of costs goes up every year and the coverage shrinks, these folks are still isolated from the real world cost of health insurance and the roadblocks that insurers throw in front of its "customers" even after paying thousands of dollars in premiums.

      in the 90's my wife had to go 7 years without seeing a doctor to provide a "clean" record of no preexisting conditions to get insurance.

      I don't believe people understand that repealing Obamacare means going back to the days of no coverage because you have visited a doctor to treat a completely unrelated condition.

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